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Houston Chronicle: Shell aims for Nigeria restart

Shell aims for Nigeria restartDelta region work could resume in a few weeks

Bloomberg News



Royal Dutch Shell may resume work in the next few weeks in parts of the Nigeria's Delta region affected by rebel attacks, Shell's head of exploration and production said Tuesday.

Shell, state-run Nigerian National Petroleum Corp. and other partners in the joint venture were losing about 455,000 barrels a day of oil output at the end of March because of violence. About one-third of the loss was Shell's share.

“I'm very encouraged by the dialogue to ensure we get back to safe operations,” Malcolm Brinded, head of exploration and production, told shareholders at Shell's annual general meeting in Scheveningen, near The Hague. Work in the region “may be back in weeks,” he said.

Violence escalated in January when militants blew up pipelines and kidnapped Shell contract workers, who were later released, halting shipments from an export terminal. Shell executives including Chief Executive Jeroen van der Veer have said since that the company would return staff to parts of the delta only when it was safe.

“Joint investigation teams are being put together at the moment to assess affected areas,” Shell's top manager in Nigeria, Basil Omiyi, told reporters after the meeting. “We hope they will be able to visit the affected areas soon. First priority will be relief materials to affected communities and environmental cleanup. Once we are back in the field we will work to restore capacity as soon as possible.”

Violence directed against Nigeria's oil industry and foreign companies may last throughout 2006 because presidential elections are next year, Citigroup analysts said in a Feb. 28 report.

Militant groups including the Movement for the Emancipation of the Niger Delta say foreign firms and the government should give a greater share of the region's oil wealth to locals.

Van der Veer told Nigerian environmental activists at the shareholder meeting Shell is working to stop gas flaring, a practice residents say leads to pollution and health problems.

“Gas flaring has severe health consequences and is a primary contributor to a host of problems that include acid rain, retarded crop yield and respiratory diseases,” Friends of the Earth said in a statement..

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